France fines bank 20 mln euros for bad trading

16th July 2009, Comments 0 comments

French authorities fined bank Caisse d'Epargne EUR 20 million for breaking oversight regulations in trading.

Paris – French authorities fined bank Caisse d'Epargne EUR 20 million for breaking oversight regulations in trading that lost it hundreds of billions at the height of the finance crisis, they said Wednesday.

Caisse d'Epargne "broke several essential regulations concerning internal oversight in market operations," the Banking Commission said in a statement, after investigating the EUR 700 million of losses reported in October.

The bank "developed particularly risky activities due to the complexity of the (financial) products concerned, without having the adequate tools and the environment" to cope with them, the commission said.

The fine, equivalent to USD 28 million, was far less than the maximum penalty of EUR 50 million, since the commission recognised that the bank had made an effort to boost oversight after discovering the losses.

The unauthorised trading scandal revived memories of the disaster revealed last year at another French bank, Societe Generale, which lost EUR 4.9 billion in deals allegedly made by a junior trader, Jerome Kerviel.

Kerviel is awaiting trial on charges of breach of trust, fabricating documents and illegally accessing computers.

The French government has insisted the country's major banks are all stable despite the international credit crunch and have in any case promised state aid to bail out any failing institution and protect depositors.

AFP / Expatica

0 Comments To This Article